The Sustainable Upper Limit of Real GDP Is a Level

question 210

Multiple Choice

The sustainable upper limit of real GDP is a level of GDP that is

• A)greater than potential GDP,but by how much greater is unknown and controversial.
• B)less than potential GDP,but by how much less is unknown and controversial.
• C)potential GDP.
• D)determined only by what is the full employment equilibrium in the labor market.
• E)None of the above answers is correct because there is no sustainable upper limit to real GDP because real GDP can always be increased.

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Definitions:

Consumption

The employment of goods and services within home environments.

Income

Monetary payment received for work or through investments.

Interest Rate

The fraction of a loan that incurs interest costs for the borrower, usually described as an annual percentage rate.

Utility Function

A mathematical representation of how a consumer's satisfaction or preference for goods and services is dependent on their consumption levels.